Tax Blog/Blawg

Many Canadians migrate south each year and become U.S. residents or citizens.  Along with the cold weather, they may also leave behind local retirement account, such as a Canadian registered retirement savings plan ("RRSP") or a Canadian registered retirement income fund (“RRIF”).  Preserving this Canadian nest egg is generally a good thing.  Indeed, it is hard to find fault with financial planning for the golden years.  This egg could turn a little rotten, though, if the person fails to appreciate the relevant U.S. tax obligations.  Unfortunately, due to the disparate treatment of ...

The difference between what taxpayers should pay and what they actually pay the IRS is called the “tax gap.”  A significant portion of the tax gap is attributable to non-compliance with employment tax laws, including worker misclassification.  The IRS is currently conducting a three-year research project, which entails an additional 6,000 random employment tax audits.  This research will inevitably lead to the conclusion that worker misclassification is rampant and depriving the federal government of billions of dollars in tax revenues each year.  Therefore, the IRS likely ...

Back in the era of beepers, being "on call" evoked imagery of importance.  Indeed, those people required by their job to carry a beeper, along with those who did so voluntary, displayed the devices with a noticeable degree of smugness.  The positive aspects of this status symbol aside, anyone who has been obligated to carry a beeper or its modern equivalent (e.g., BlackBerry, iPhone, PalmPilot, etc.) understands that being constantly reachable is often more of a curse than a blessing.

Many jobs mandate that a person respond to messages within a certain period of time, minimize travel so ...

The tax code is best known for its strict rules, but it also features hundreds of taxpayer-favorable elections.  The first step to evaluating and possibly taking advantage of these elections is being aware of their existence.  Unfortunately, taxpayers and/or their advisors sometimes overlook an election or fail to follow the related procedures.  A classic example is the so-called "aggregation election," under which taxpayers who qualify as real estate professionals can choose to combine all their interests in real estate endeavors for purposes of the passive activity rules in ...

Nearly all taxpayers will face penalties by the IRS at some point, regardless of their sophistication level and size.  Accordingly, tax practitioners, even those who claim not to get involved in traditional "collection" activities, must understand key aspects of abatement and collection procedures in order to effectively advise their clients.  This is particularly true given that the IRS persists in taking extreme positions in the Tax Court, such as the always-say-never approach, that are contrary to the majority of existing legal authorities.  A recent example is Custom Stairs & ...

For better or worse, many a tax dispute has been won or lost on procedure, often on the question of whether a document - be it a tax return, refund claim, or petition - was timely filed.  The centrality of this issue helps explain the renown of the otherwise unremarkable "mailbox rule" (a.k.a. the "timely-mailing-is-timely-filing rule").

The attached article, published in the International Tax Review, examines a recent case, Dietsche v. Commissioner, in which the Tax Court ruled that a petition mailed from New Zealand and postmarked the day after its due date was not timely filed ...

Nowadays, newspapers and tax journals often contain articles about international tax issues, particularly the duty of U.S. persons to file an annual Form TD F 90-22.1 ("FBAR") to report their interests in foreign financial accounts.  As general knowledge of the FBAR increases, the chances of taxpayers avoiding penalties on grounds that they did not act "willfully" decrease. Nevertheless, one recent case fought before both the Tax Court and a federal district court, in United States v. Williams, 09-cv-437 (E.D. Va. 2010), offers support for the notion that where there's no will ...

Much confusion has existed over the past few years about filing Form TD F 90-22.1 ("FBAR") to report foreign accounts to the IRS.  To remedy this, the IRS issued pronouncements in 2009 and 2010 granting certain FBAR filing exemptions and penalty waivers.  Many of these benefits had retroactive effect.  A recent criminal case, United States v. Simon, calls into question the validity of the IRS pronouncements.  By holding that the U.S. Department of Justice may pursue criminal prosecutions in situations where the IRS publicly indicated that it would not even assert civil penalties, this ...